With China surpassing the Eurozone as the world’s largest banking center, the EU may seek to use the RMB during its next bailouts
With China surpassing the Eurozone as the world’s largest banking center, the EU may seek to use the RMB during its next bailouts by Kenneth Schortgen
On March 6, the Financial Times reported that China had overtaken the European Union as the world’s largest banking center, making the Far Eastern nation the overall top financial behemoth in the global economy.
For awhile now, China has been the largest individual banking state, well surpassing the U.S. when it comes to lending, monetary creation, and bi-lateral trade. However with the European Union it is quite different as they tend to express themselves in the power of their coalition rather than through the strength of individual member states. And thus over the past eight years the decline of the EU’s financial system has gone almost in parallel with the rise in China’s expansions such as their Silk Road initiative, the Shanghai Cooperation Organization, and the Asean group.
Additionally, China has also used their growing monetary power to create new infrastructures meant to compete with, if not supplant Western control over the global financial system. Beginning with the creation of a partnership with Russia in 2014 to allow the sale of oil to occur using both the Yuan and the Ruble that put a major crack in the long-standing petrodollar system, and followed by the creation of the AIIB, BRICS Bank, and Shanghai Gold Exchange that almost instantaneously gave the rest of the world options to move away from dollar hegemoney, the Chinese are setting themselves up as the new kids on the block who have enough muscle to stand toe to toe with the bully who has for decades been able to take everyone elses lunch money.
Yet despite all the success that China has achived in the Eastern hemisphere, the primary fruit left to harvest is that of Europe. For if China could coax the member states of the EU, or the bureaucracy of the Union itself to switch sides and move into China’s camp voluntarily, then it would isolate the United States and culminate in a bloodless change in the balance of power, setting the stage for the 21st century to become a Chinese century.